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on Labor Markets - Supply, Demand, and Wages |
| By: | Gert Bijnens; Anders Humlum; Stijn Vanormelingen |
| Abstract: | New machinery has long been argued to raise the relative demand for skilled labor, yet firm-level evidence finds no such shift at investing firms. We resolve this puzzle by looking beyond firm boundaries. Linking Belgian data on capital investments, buyer–supplier transactions, and worker skills, we show that the skill bias of new machinery arises entirely at external suppliers. Following machinery investment spikes, purchases from suppliers raise firms’ total demand for high-STEM workers by 45%, three times the rise for other skill groups, while in-house hiring raises it by less than 5%, evenly across skill groups. This external demand comes first from machine integrators and later from complementary services such as software, and is stronger for smaller firms, lumpier investments, and rapidly advancing capital, consistent with fixed and adjustment costs of hiring high-STEM workers in-house. In a general-equilibrium model estimated on our event studies, the rise in machinery per worker from 2003 to 2021 raises relative demand for high-STEM workers by 8.8 log points and their wage premium by 3.1. Measured on payrolls alone, both would fall. |
| JEL: | E22 J23 J24 J31 L24 O33 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35857 |
| By: | Cristóbal Castro Barrientos (Auckland University of Technology) |
| Keywords: | higher education, returns to education, qualifications, vocational education, gender, New Zealand |
| JEL: | I26 J31 J24 J16 |
| Date: | 2026–10–05 |
| URL: | https://d.repec.org/n?u=RePEc:aut:wpaper:2026-04 |
| By: | Richard Blundell; Monica Costa-Dias; Graham Mazeine; Costas Meghir; Tom Waters |
| Abstract: | Work experience has been found to be a key determinant of work and wages for educated women, but it seems to play a smaller role for the less educated. For them, welfare, tax credits and family composition matter more, and increasingly so does participation in disability programmes. Here we document how labor supply, wages, health, and disability claims have evolved in the UK over the last three decades, and examine how reforms to tax credits, disability benefits and other welfare programs have changed work incentives over this period. We then introduce these features into an empirical dynamic structural model of life-cycle labor supply, human capital and disability benefit application, in which human capital combines health capital, experience accumulated in work, and education. Estimating the model on a panel of working-age women in the UK, we examine the interactions between experience capital and health capital in driving life-cycle earnings across different education groups. Our results highlight the importance of interactions in the disability benefit, welfare and tax-credit systems for understanding the life cycle pattern of hours, employment, earnings, and disability claims, and for evaluating policy counterfactuals. |
| JEL: | D15 D31 H24 H31 I14 I3 J14 J22 J31 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35861 |
| By: | Simon Quach |
| Abstract: | This paper examines the labor market effects of overtime coverage in the United States, where salaried workers are covered for overtime if their base pay falls below a legislated salary threshold. Using an event-study design with administrative payroll data and state-level threshold changes from 2014-2021, I find evidence against conventional models of overtime. Contrary to the historical intent of policymakers, firms do not increase employment by substituting more workers for fewer hours. However, contrary to compensating differential models, firms also do not offset the costs of overtime by lowering workers' base pays. Instead, employers raised salaries above the threshold to keep workers exempt from overtime, indicating that monitoring and adjusting workers' hours is costly for firms. Taken together, these results suggest that expanding overtime coverage increases workers' earnings without negatively impacting employment. |
| Keywords: | overtime, Fair Labor Standards Act (FLSA), salary threshold, labor regulation, hours of work, salaried vs hourly employment, bunching |
| JEL: | J08 J23 J38 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26222 |
| By: | Juan Pablo Atal; Tomás Larroucau; Pablo Muñoz; Cristóbal Otero |
| Abstract: | Occupational licensing is a widespread quality regulation that potentially increases the quality of labor but reduces its quantity. We provide a theoretical framework to empirically quantify this trade-off in public hospitals, where both clinical quality and physician shortages are critical concerns. Using quasi-exogenous variation driven by a recent and unprecedented migration of physicians to Chile, together with growth in domestic medical schools, we show that more physicians improve patient outcomes, while lower-quality physicians—as measured by licensing exam performance—worsen them. Incorporating these findings into our theoretical framework, we evaluate the implications of locally changing the stringency of the licensing policy. |
| JEL: | I18 J24 J44 J45 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35855 |
| By: | Daniel P. Gross; Dror Shvadron; Hansen Zhang |
| Abstract: | Large language models are diffusing rapidly into science, raising concerns that delegating research writing to AI may undermine the development of expertise that scientific training is supposed to build. We measure AI-generated writing in the dissertations of a near-census of US STEM PhD graduates from 2019 to 2026 and link graduates to their subsequent employment. AI writing is absent before 2023, present in 29% of dissertations filed in 2026, and rapidly growing. Use is more common among students from non-English-speaking countries and at lower-ranked programs. Among graduates in the same program and cohort, those whose dissertations contain AI writing are less likely to enter academic research careers and more likely to enter non-tenure-track roles or industry, with this pattern strongest among US-origin students. At the same time as AI may increase research productivity, it thus appears to also be displacing a potentially important portion of the work through which scientific expertise is developed. |
| JEL: | I23 J24 O31 O33 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35859 |
| By: | Rajashri Chakrabarti; Philippe d'Astous; Kory Kroft; Sheisha Kulkarni; Vyacheslav Mikhed; Matthew J. Notowidigdo; Sahil Raina; Barry Scholnick |
| Abstract: | We estimate the causal effects of a financial windfall on consumption, savings, and wage earnings using linked administrative data on a large sample of Canadian lottery winners. Using separate linkages of lottery winners to income tax records and credit bureau data, we estimate how lottery winnings affect consumption measured through credit card spending, savings through financial asset accumulation and debt repayment, and wage earnings from tax records. We then examine how these responses vary across the income distribution. We find that high-income individuals allocated a larger share of lottery winnings to savings and leisure, while low-income individuals spent a larger share on consumption. We illustrate the policy relevance of these heterogeneous responses through three applications: designing fiscal stimulus programs, evaluating a Universal Basic Income (UBI), and determining optimal top tax rates on wage earnings and savings. |
| JEL: | D15 H2 J22 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35836 |
| By: | István Boza (ELTE Centre for Economic and Regional Studies); László Czaller (Corvinus University of Budapest; ELTE Centre for Economic and Regional Studies) |
| Abstract: | This paper examines how workers and employers jointly shape spatial wage disparities across Hungarian local labor markets. We combine longitudinal linked employer–employee administrative data for 2012–2022 with functional local labor markets constructed from district-to-district commuting flows in the 2022 Hungarian Census. Our preferred delineation contains 29 commuting zones and raises the share of employed residents working within the same unit above 90 percent, compared with 72 percent for districts and 81 percent for counties. We estimate an additive worker–employer fixed-effect wage model and decompose wage variation at the individual level, between commuting zones, and within commuting zones. Differences in commuting-zone mean wages account for 2.8 percent of national log-wage variance and 1.1 percent when the Budapest commuting zone is excluded. Although the between-zone component is modest, its structure is systematic: zones with higher average worker effects also tend to have higher average employer wage premia, so the spatial alignment of worker and employer components accounts for an important part of spatial wage differences. Wage dispersion and the relative importance of worker heterogeneity, employer premia, and worker–employer sorting within local labor markets also vary substantially across the country. The results indicate that spatial wage disparities in Hungary reflect not only differences in workers’ earnings potential and the employer premia attached to their jobs, but also how these components are combined across local labor markets. |
| Keywords: | commuting zones; regional wage inequality; linked employer–employee data |
| JEL: | J31 R12 R23 C23 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:has:discpr:2615 |
| By: | Isabella Mantel; Regina T. Riphahn |
| Abstract: | Demographic aging causes substantial worker shortages. So far, policy debates neglect the aspect of age at labor market entry. We study the age at which young individuals first enter the labor market and how it has developed over the last four decades. Based on long-running administrative data, we describe birth cohorts from 1960 through 2000, and separately consider different types of employment entry. We investigate the entry age distribution and heterogeneities across demographic groups. We find that conditional on employment, the median age of first holding a stable full-time employment increased by almost 4 years between the birth cohorts 1960 and 1995. Our decomposition analysis yields that more than one quarter of this increase is explained by higher educational attainment and the rising share of non-German workers, which appear to be the main mechanisms behind the delay in labor market entry. Additionally accounting for changed occupations, industry composition, and relative entry-level earnings explains about 40 percent of the observed delay in labor market entry. The role of different mechanisms varies across the types of employment entry. |
| Keywords: | demographic aging, age at labor market entry, administrative data |
| JEL: | J11 J21 I28 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:250_mantel_riphahn.rdf |
| By: | Guida Ayza Estopà; Bart Cockx; Sébastien Fontenay; Ilan Tojerow |
| Abstract: | This paper studies how financial incentives shape labor supply decisions among disability insurance (DI) recipients who already combine benefits with part-time work. We exploit a distinctive feature of the Belgian Adapted Work Program, in which DI benefits are progressively withdrawn as earnings increase and the marginal withdrawal rate rises sharply at predefined thresholds. Because participants cannot freely adjust their working hours, this setting allows us to estimate how higher implicit taxation affects transitions out of partial work. Using administrative data and a Regression Kink Design, we find that higher implicit tax rates induce exits in two opposite directions: toward full-time employment and back to full DI. A one euro increase in the implicit marginal tax per working day raises the probability of returning to full DI by 3.0 percentage points and of resuming full-time employment by 1.5 percentage points, corresponding to elasticities of 0.84 and 0.85. A simple labor supply framework rationalizes these divergent responses. Our findings show that the financial design of partial-benefit schemes can determine whether partial work serves as a bridge toward full employment or instead leads recipients back to full benefit dependency. |
| Keywords: | disability insurance, return-to-work policies, financial incentives, regression kink design |
| JEL: | I13 I38 J14 J22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13041 |
| By: | Ana Figueiredo; Agnieszka Markiewicz; Elliott Weder |
| Abstract: | Using matched employer-employee data from the Netherlands, we decompose the wage penalty of temporary work. Temporary workers earn 28 log points less per hour than permanent workers. Worker fixed effects explain half this gap, while firm pay premia account for 28%. Most of the firm contribution reflects temporary workers sorting into low-paying firms rather than within-firm pay differences. As temporary employment differs substantially across demographic groups, we extend our framework to gender and native-migrant wage gaps, separating contract from firm sorting. Differential exposure to temporary work explains part of the native-migrant firm pay-premia gap but matters little for the gender wage gap. |
| Keywords: | Temporary employment; Firm pay premia; Wage inequality |
| JEL: | J31 J41 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26240 |
| By: | Peter Haan; Julia Schmieder; Izabela Wnuk-Soares |
| Abstract: | We study how immigration affects prices through changes in labor supply. Using policy-driven increases in immigration to Germany and administrative data covering the universe of nursing homes, we find that one additional foreign-born woman per 100 residents reduces nursing-home care prices by 2.6 percent. The price effects are concentrated in more competitive markets. Examining potential mechanisms, we find that immigration lowers labor costs as nursing homes shift toward lower-paid foreign-born workers. We find no evidence of declines in inspection-based measures of quality or of scale effects. Finally, immigration increases the use of informal care, potentially strengthening competitive pressure from the broader care market. |
| Keywords: | Immigration, labor supply, prices, nursing homes |
| JEL: | J61 F22 J30 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26224 |
| By: | Andrew C. Barr; Laura Kawano; Bruce Sacerdote; Michael Stevens |
| Abstract: | The COVID-19 pandemic caused a sharp initial rise in unemployment, followed by an unexpectedly tight labor market. Using a panel of tax data containing newly assembled information on worker occupation, we document persistent labor force exit, especially among low-income and low-skill workers. Low-skilled unmarried men are by far the most likely to exit, reinforcing recent concerns regarding the economic and social engagement of this group. Contrary to prevailing theories, we find little evidence that school closures, virus exposure, stimulus payments, or unemployment benefits explain these exits. Nor is the exit explained by additional upgrading of occupations or firm quality. Individuals who leave the labor force do not (on average) make up the missing income; however, self-employment income replaces roughly a quarter of the lost W-2 income. The facts suggest that the willingness to work for low pay decreased and preferences for leisure and job flexibility increased among a large set of workers who have found ways to get by with less income. These results have implications for tax policy, fiscal projections, and labor market dynamics in the post-pandemic economy. |
| JEL: | J01 J2 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35856 |
| By: | Menna Bishop; Niclas Moneke; Celine Zipfel |
| Abstract: | Towns and cities create jobs and income. Can the arrival of new jobs also create a town? We study large agro-industrial labour demand shocks in rural sub-Saharan Africa: flower farms in Kenya. Rising production costs in Europe generate a boom in Kenyan cut-flower export production, providing stable wage jobs for mostly low-skilled women. We exploit the specific requirements of cutflower production to track the arrival and growth of greenhouses over the last two decades. We find large increases in wage employment and home-to-market transformation within agriculture, especially for women. Urbanisation unfolds: population growth and in-migration are flanked by an emerging private rental market for housing. Housing quality and infrastructure access improve, wealth accumulates. Educational investments increase while fertility decreases. Suggestive evidence highlights that the resulting towns initiate occupational change, motivate forward-looking investment and even survive flower farm closures - indicating towns that can sustain themselves as centres of economic activity. |
| Keywords: | Town formation, wage employment, agro-industry, Kenya |
| JEL: | J21 O14 O18 R11 Q13 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26223 |
| By: | Sevrin Waights; Liliana Cuccu; Maximilian Priem |
| Abstract: | We provide the first estimates of minimum wage effects on the aggregate price level using data on the near-full German consumer basket across four national reforms, 2015-2024. Drawing on a structural model of pricing under imperfect competition, we utilise minimum wage cost shocks rather than the commonly used firm-level ‘bite’ that we show to be biased under strategic complementarity. Labour cost pass-through is 83-94 percent, at the higher end of estimates for other cost shocks. The implied macro-price elasticity is 0.024. The largest increase in October 2022 to €12 raised the aggregate price level by 0.39 percent. |
| Keywords: | Minimum wages, Consumer prices, Inflation, Cost pass-through, Strategic complementarity |
| JEL: | E31 J08 J30 J38 L11 |
| Date: | 2026–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0112 |
| By: | Gabriele Letta; Luca Salmasi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro CuoreAuthor-Name: Lorenzo Cappellari); Gilberto Turati (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore) |
| Abstract: | We study how uncertainty about future household income affects the decision to continue an ongoing pregnancy. To distinguish the role of uncertainty from that of realized income losses, we exploit the Italian labour-market response to the first wave of the COVID-19 pandemic. While the temporary suspension of non-essential economic activities substantially increased uncertainty about future economic prospects, workers affected by mandatory closures continued to receive income support through the national short-time work scheme. Using nationwide administrative records on voluntary pregnancy terminations and births, we combine this institutional setting with geographic variation in exposure to temporary work suspensions across municipalities. Differencein- differences estimates show that abortion rates declined throughout Italy following the lockdown, but the decline was significantly smaller in municipalities more exposed to work suspensions. The effect is concentrated among married women outside the labour force and is strongest in municipalities with greater industrial employment. This pattern is consistent with uncertainty affecting households whose economic prospects were more exposed to temporary work suspensions. We find no corresponding effects on births. The estimates suggest that uncertainty about future household income can substantially affect pregnancy decisions even in the absence of permanent job loss. |
| Keywords: | Household income uncertainty; Pregnancy decisions; Abortion; Temporary work suspensions; COVID-19. |
| JEL: | J13 I12 I18 J22 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie1:def157 |
| By: | Nikita Melnikov; Carlos Schmidt-Padilla; María Micaela Sviatschi |
| Abstract: | What are the consequences of restoring state authority in territories governed by criminal organizations? Combining household surveys and administrative records with detailed maps of former gang-controlled areas, we study how El Salvador’s 2022 State of Exception, which ended two decades of gang territorial control, reshaped Salvadoran society. We find that the removal of gang control integrated previously segmented labor markets, improving mobility, employment outcomes, household income, and financial inclusion. Areas with greater pre-2022 gang exposure also experienced larger increases in business formation and property investment. However, the legacy of criminal governance persists through residence-based discrimination: employers remain less willing to hire otherwise identical applicants from former gang-controlled neighborhoods. Finally, although overall support for the crackdowns remains high, individuals who witnessed police abuse report substantially greater distrust of the police and the national government, suggesting that abuses of state authority may undermine the political sustainability of tough-on-crime policies. |
| JEL: | O10 P0 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35866 |
| By: | Betcherman, Gordon; Honorati, Maddalena; Moessinger, Martin |
| Abstract: | While the literature on the minimum wage is largely retrospective, analyzing impacts of past policy changes, this paper is uniquely forward-looking, forecasting how a proposed reform in Ukraine would affect future employment, earnings, and social contributions. The analysis simulates these effects by mimicking a proposal that would set a minimum wage floor equal to 40 percent of the previous year’s average wage once martial law is over and increasing the minimum wage by two percentage points annually until reaching 50 percent of the previous year’s average wage. The analysis draws on a 10 percent random sample of 2023 worker-level data from the Pension Fund of Ukraine, covering all jobs with pension contributions in the private sector and nonmilitary public sector. The results indicate that, under the proposal, by the end of the five-year transition period, the minimum wage would be 45 percent above the level it would have reached if adjusted only for wage inflation, which serves as the counterfactual. Projected job losses would be modest (0.51–1.03 percent), while total earnings would increase by up to 3.24 percent. The effect on social contributions and taxes would be the same as the effect on earnings since they are a fixed percentage of earnings in Ukraine. Applied to an administrative data set covering all formal sector workers, the methodology developed in the paper offers a useful tool for policy makers to anticipate the likely effects of the minimum wage reforms that are being considered. The paper concludes by discussing policy implications. |
| Date: | 2026–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11443 |
| By: | Alden Cheng; Riley League |
| Abstract: | We study strategic responses by firms to threshold-based regulations. We document extensive bunching in response to additional staffing requirements for California nursing homes with at least 100 beds. To estimate the regulation’s effect on staffing, we develop a novel treatment effects estimator for threshold-based regulations under precise manipulation, by decomposing firms into response types based on counterfactual and realized staffing and size, separating causal effects from selection. We estimate that higher staffing above the threshold is nearly entirely due to selection, with low-staffing facilities manipulating their size to avoid the regulation. These size distortions limit access, particularly for disadvantaged patients. |
| JEL: | I11 I18 L51 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35849 |
| By: | Daniel Aaronson; Mark Borgschulte; Sunny Liu; Bhashkar Mazumder |
| Abstract: | Does education lead to political activity? We find that a large, early 20th century school construction program, the Rosenwald schools, led to more NAACP branches in the rural South starting in the early 1940s, i.e. prior to the classic U.S. Civil Rights Movement. Branch growth was stronger where Jim Crow occupational segregation prevented Black men from realizing some of the economic gains of their education. Our findings lend support to theories emphasizing that economic context can act as a critical mediator in determining whether human capital causes political engagement. |
| JEL: | I20 J71 N32 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35842 |
| By: | Daniel Herbst |
| Abstract: | Compared to self-employment or performance-based pay, fixed wages reduce earnings uncertainty but are prone to market distortions through moral hazard and adverse selection. Using a model of wage contracts under asymmetric information, I show that these distortions map to marginal treatment response functions in a marginal treatment effects (MTE) framework. I apply this framework to a field experiment in which data-entry workers choose between a randomized fixed wage and a piece rate. I find evidence of both moral hazard and adverse selection: Fixed wages reduce worker productivity by an estimated 8.74 percent relative to the mean. Meanwhile, a 10 percent increase in the wage offer attracts a marginal worker whose productivity is higher by 1.90 percent of the mean. Using semi-parametric MTE estimation, I calculate the welfare loss associated with asymmetric information and the marginal values of public funds (MVPFs) for policies aimed at recovering this loss. I find that a tax on piece rates can mitigate adverse selection into fixed wages, generating tax revenue at social costs as low as $0.88 per dollar. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.06827 |
| By: | Richard B. Freeman; Danxia Xie; Hanzhe Zhang; Hanzhang Zhou |
| Abstract: | We analyze the academic affiliations of nearly 6, 000 award-winning researchers in 18 major fields in the natural sciences, engineering, and social sciences from the 1820s to the 2020s, focusing on the 1960s onward. The analysis reveals a trend of declining concentration in the institutional affiliations of award-winning researchers, shifting from a few science-strong universities in high-income countries to a more diverse set of institutions across the world. The decline in concentration is observed in all fields except one: economics. The institutional affiliations of prizewinning economists have become more concentrated over time, making economics the most concentrated field. We associate the higher concentration of prizewinning work in economics with the field’s stronger sorting by institutional prestige, its lower reliance on specialized equipment and instruments, and its assessment of findings based on a synthesis of evidence rather than on decisive experiments or proofs. We discuss the benefits and costs of this high and rising institutional concentration of prizewinning economists. |
| JEL: | A11 A12 A14 I23 J44 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35875 |
| By: | Danilo Cavapozzi; Marco Francesconi; Cheti Nicoletti |
| Abstract: | Women perform most of the housework despite substantial convergence in labor market outcomes. We develop and estimate a semi-structural model of household housework decisions that combines randomized vignette experiments with an epidemiological identification strategy to estimate the contributions of economic utility and social norms. Equal sharing of housework yields higher economic utility for both men and women, while households use domestic work to offset differences in labor market involvement. Yet women continue to perform a disproportionate share of housework, largely because of social norms. Exposure to more egalitarian gender norms significantly increases the likelihood of more balanced housework allocations. |
| Keywords: | Intrahousehold allocation of chores, Labor supply, Vignettes, Gender role norms, Gender gaps |
| JEL: | C25 C26 D13 J16 J22 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26227 |
| By: | Benoit Dostie; Genevieve Dufour |
| Abstract: | This report uses data from Statistics Canada’s Survey of Employers on Workers’ Skills (SEWS) to provide an overview of the skills sought, available, and developed within Canadian businesses. It focuses in particular on basic mathematics skills, numeracy, critical thinking, and problem-solving, comparing Quebec with Ontario and the rest of Canada. Our results show that basic mathematics skills are rarely perceived as a skills gap by businesses, both in Quebec and elsewhere in Canada. Quebec businesses, however, place relatively greater emphasis on technical, managerial, and computer skills, and less emphasis on critical thinking, problem-solving, and communication, both when recruiting and when developing employees’ skills. The results also show that Quebec businesses differ in how they manage skills. They assess their skills needs less frequently, make less use of informal skills-development practices such as mentoring and feedback, and report greater recruitment difficulties, regardless of the level of education required. Across all three regions, more than half of businesses attribute these difficulties to a lack of interested applicants, suggesting that job attractiveness is as much an issue as an actual shortage of skills. Finally, when faced with skills gaps, businesses tend to favour internal work reorganization rather than investing in human capital development. Ce rapport utilise les données de l’Enquête auprès des employeurs sur les compétences du personnel (EECP) de Statistique Canada pour brosser un portrait des compétences recherchées, disponibles et développées dans les entreprises canadiennes. Il porte une attention particulière aux compétences mathématiques de base, aux capacités de calcul, à la pensée critique et à la résolution de problèmes, en comparant le Québec à l’Ontario et au reste du Canada. Nos résultats montrent que les compétences mathématiques de base sont rarement perçues comme une lacune par les entreprises, au Québec comme ailleurs au Canada. En revanche, les entreprises québécoises accordent relativement plus d’importance aux compétences techniques, de gestion et informatiques, et moins à la pensée critique, à la résolution de problèmes et à la communication, tant lors du recrutement que dans le développement des employés. Les résultats montrent également que les entreprises québécoises se distinguent en matière de gestion des compétences. Elles évaluent moins souvent leurs besoins, recourent moins aux pratiques informelles de développement des compétences (mentorat, rétroaction) et déclarent davantage de difficultés de recrutement, quel que soit le niveau de scolarité. Dans les trois régions, plus de la moitié des entreprises attribuent ces difficultés au manque de candidats intéressés, ce qui renvoie à un enjeu d’attractivité des emplois autant qu’à une véritable pénurie de compétences. Enfin, lorsqu’elles font face à des lacunes de compétences, les entreprises québécoises privilégient la réorganisation interne du travail plutôt que le développement du capital humain. |
| Keywords: | Training, Labour Market, Mathematics, Skills, formation, marché du travail interne et externe, mathématiques, Compétences |
| JEL: | J24 J23 M53 |
| Date: | 2026–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirpro:2026rp-20 |
| By: | Garg, Prashant (Bocconi University); Lambert, Peter John (University of Warwick & London School of Economics); Martin, Ralf (Imperial College London, Centre for Economic Performance and CEPR); Medvedev, Denis (World Bank) |
| Abstract: | This paper pilots a method for measuring firms' product and process innovation at scale. Our approach uses LLMs to complete a detailed innovation survey for a sample of 600, 000 companies operating across 40 countries. The preliminary results contain 6 million individual instances of innovative activity along with rich textual descriptions. These responses carry signal, for example a one-standard-deviation increase in a firm's product innovation index is associated with a 5% higher measured TFP residual. The data reveal that innovation is widespread: two-fifths of companies engage in product innovation and one-quarter in process innovation, far exceeding the share of patenting firms. Firms are more likely to have labor-augmenting than labor-saving introductions, while about 14% have green product in novation and 12% have green process innovation. Greenness and net labor augmentation are positively associated across countries. Beyond our specific application, this paper illustrates the potential for using LLMs to generate survey-level insights at population scale. |
| Keywords: | Innovation direction; Green innovation; Automation; LLMs; AI measurement; Patents JEL Classification: O30; O31; O33; O34; Q55; J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:825 |
| By: | Christian Alemán; Christopher Busch; Raül Santaeulàlia-Llopis; Tetyana Surovtseva |
| Abstract: | We introduce a unified double selection framework accommodating group-specific additive and multiplicative shifters of an unobserved common time trend (CTT). Under double selection, the CTT does not manifest as a parallel trend; the resulting non-constant selection bias is a linear combination nesting standard difference-in-differences (DiD) in levels and logs. Opposing shifters can yield patterns structurally impossible under standard DiDs, such as a ranking reversal of the groups over time. We establish that in the presence of double selection bias treatment effects are non-parametrically identified by the change of the ratio of within-group outcome changes over time. The double selection structure induces a stable linear relationship in the outcome-on-outcome space, grounding a simple two-step estimator operating in levels. Revisiting Card (1992), double selection uncovers valid counterfactuals where standard DiD fails. |
| Keywords: | double Selection, difference-in-differences, causal inference, nonparametric identification |
| JEL: | C14 C21 J38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13035 |